I don't get the calculation for the market coverage:
The infrastructure investments of €300 m would cover 11% of the Chinese market.
Where does the 100 m in the division come from?
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Why 11%
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Hi Anonymous,
I had a quick look at the case you mentioned. In my understanding it comes from this part: "A new factory in Spain that produces €100 m worth of products".
So we are now talking about potential revenues of this Spanish factory of 100m, which is 11% of the market since we have sick patients (660m) pregant women (225m). So 100m worth of products covers 11% of this market.
Hope that helps - if so, please give it a thumbs-up with the green upvote button below!
Robert
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Hello,
The text says:
A new factory in Spain that produces €100 m worth of products per year would require €500 m investment. The same factory in China would cost €300 m.
From this part you can assume that you are now evaluating to build a new factory in China, investing 300M€, that produces 100M€ worth of products per year.
The total market in China is composed by:
- Pregnant women market: 225M€
- Sick patients market: 660M€
The total market is then 885M€. If you want to know what would be your coverage with the new plan, you have to calculate: Production/Total Market=100M€ / 885M€= 11.3%
Hope it helps,
Luca
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Hello!
It´s the % of the Spanish over the total:
- Spanish: 100M worth
- Total: 885 = 660 (sick patients) + 225 (pregnant women)
Hence, 100/885 = 0.11 = 11%
Hope it helps!
Cheers,
Clara
(edited)
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I confirm you have to divide it by 885
Best,
Antonello
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